transNational corporations for host countries Flashcards
multiplier effect
(a small input has a much larger output )
increasing positives over time
benefits brought by MNCs
if labour costs are low, then a product can be made cheaper and the price of the product falls
people in america, europe and asia can buy cheaper goods
what is a MMC?
multinational corporation
what is development
.The process of change for the better this can be economic, social or political
what does the term development gap mean
The widening difference of development between rich and poor.
what is the world bank
An international financial institution that provides loans to developing countries for capital programmes.
what is the development continuum
A linear scale from high developed countries to those with a low level of development.
what 4 catergories of wealth does the world bank place countries in
High income countries (HIC’s),
Upper-middle-income countries,
Lower-middle-income countries,
Low income countries (LIC’s)
gross domestic product (GDP) is one way to measure economic development. what is it?
The total value of all goods and services produced within a country in a year (Total value of the economy)
the average wage of a countries population is known as
Gross national income (GNI)
give 2 other ways we can measure economic development
Poverty: The percentage of the population that earn less than $1.90 per day according to the world bank.
Employment structure: The type of work people do (Primary-Like farming, Secondary-Factory work or tertiary -Services)
what is purchasing power parity (PPP)
A way of comparing the average wealth of a country by taking the cost of living in those countries into account it converts the GNI into a figure that describes what that money will buy in local prices.
what are the limitations of using economic measures of development
They measure only wealth and do not include social factors, They do not recognise the inequality within a country, Without PPP it does not consider the cost of living and what people can afford within that country.
what does NIC stand for
Newly industrialised country - India, China, Mexico, Brazil.
malawi is an example of an LIC country which is land locked what does this mean
It has no coastline and therefore has no sea ports
what key issues does being land locked create for malawi
.Difficulty trading with other countries.
what type of products does malawi export
Tobacco, Tea, Cotton, Sugar - Low value goods
what type of products does malawi import
Oil and Farm machinery - High value products
what do HIC’s export
Manufactured goods
what do LIC’s export
Primary goods
what is globalisiation
The process by which the world’s economies, societies and cultures have become integrated through communication, transportation and trade.
what 4 factors drive globalisation
.MNC’s (Multinational companies),
Communication technologies,
Trade,
Culture
5 ways that NIC’s such as india and china benefited from globalisation
Rapid economic growth, Cheap labour so manufacturing industry boomed, Changes in technology so they can invest and encourage MNC’s to locate to them, Flows of people- Migration, Flows of idea and culture - Bollywood
5 reasons MNC’s such as nike locate to NIC’s and LIC’s
-Weaker legislation on staff safety, welfare and environment
-Lower labour costs
- Reduced costs of buildings and land
-Government incentives
- Closer to markets where goods are sold.
what are the positives of MNC’s such as Nike location to NIC’s and LIC’s
Investment provides jobs and skills for local people, Multiplier effect
what are the negatives of MNC’s such as Nike location to NIC’s and LIC’s
Profits sent back to HIC where the MNC is based
MNC’s can drive out local businesses.
If the MNC decides to close its factory to relocate people can be made redundant.
Lack of laws mean that they operate in a way that they wouldn’t be able to in a HIC e.g polluting rivers, Sweatshop conditions for workers etc.
what country did you study for where nike produces sports wear
vietnam
what is foreign direct investment
investment from overseas into NICs from MNCs.
what are trade blocs? can you give an example of one
Trading partnerships between different countries e.g European Union,
